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Stability efficiency in Islamic banks: Does board governance matter?

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  • Safiullah, Md

Abstract

We contribute to the literature by examining the extent to which Shariah board governance in Islamic banks influences stability efficiency. We find a positive association between Shariah board governance and stability efficiency using a sample of 94 Islamic banks from 28 countries during the period 2003–2018. Our result holds when we employ the propensity score matching estimates, instrumental variable approach and dynamic panel GMM approach to address potential endogeneity issues. Further tests reveal that the effect of Shariah board governance on stability efficiency is more pronounced in countries with lower national governance than higher national governance and in large Islamic banks than their small peers.

Suggested Citation

  • Safiullah, Md, 2021. "Stability efficiency in Islamic banks: Does board governance matter?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
    • Handle: RePEc:eee:beexfi:v:29:y:2021:i:c:s2214635020303713
    DOI: 10.1016/j.jbef.2020.100442
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    References listed on IDEAS

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    Cited by:

    1. Djebali Nesrine, 2023. "Does governance matter for bank stability? “MENA region case”," Journal of Asset Management, Palgrave Macmillan, vol. 24(4), pages 312-328, July.
    2. Safiullah, Md, 2023. "Funding liquidity in Islamic banks: Does the Shariah supervisory board's higher educational attainment matter?," Pacific-Basin Finance Journal, Elsevier, vol. 78(C).

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    More about this item

    Keywords

    Stability efficiency; Islamic banking; Board governance;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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